Coalition Applauds Decision to Adopt Final Regulations

The Office of Administrative Law Approves Implementation of New Alcopops Tax

SACRAMENTO, Calif., June 12 /PRNewswire-USNewswire/ --Betty T. Yee, Vice Chair
of the State Board of Equalization (BOE), today announced final approval by
the state's Office of Administrative Law (OAL) of BOE-adopted regulations
implementing the taxation of flavored malt beverages as distilled spirits.
"These regulations are an important step to make a difference in the human
toll and suffering from underage drinking," said Yee. "This action is a
direct result of the extensive visits and testimony of young people who shared
their perspectives and their peers' experiences around the consumption of
flavored malt beverages."

The California Coalition on Alcopops and Youth is a diverse, broad-based group
of individuals and community-based organizations who have joined together to
help contain the growing problem of underage drinking, in general, and
specifically "alcopops." The Coalition spearheaded this campaign to raise the
awareness of underage drinking with a focus on the role that alcohol
advertising and marketing plays in contributing to the problem.

Now that the Board of Equalization will tax alcopops and other beverages that
contain distilled spirits as distilled spirits instead of beer, the state
could collect more than $40 million per year in tax revenues. Beer is taxed at
20 cents a gallon where as distilled spirits are taxed at $3.30 a gallon.

"When I first heard about alcopops, and I learned about the effects of this
unacceptable product, I knew I had to join the fight to reclassify these
dangerous drinks," said Kellie Goodwin, 17, a California Youth Council member.
"We thank the BOE for their brave efforts because reclassification of alcopops
will help fight underage drinking, and generate millions of extra tax money
that our state could use for California kids. Increasing the price of these
products will help decrease the number of youth who can afford them. We will
now wait for a response from Governor Schwarzenegger, to our request that he
direct Alcoholic Beverage Control to change where these products can be sold."

In California, underage drinkers consume 12.4 percent of all alcohol sold in
the state--or about $2.3 billion. These sales provided profits of $1.1 billion
to the alcohol industry. Underage drinking costs the state in excess of $7
billion annually. Besides the financial implications, the threats to public
health and safety include alcohol-related youth violence and traffic crashes.

An American Medical Association study found that alcopops are particularly
popular among teen girls, and that the marketing of these products reaches
deeply into the underage population. According to the AMA, while underage
drinking decreased in the last few decades, alcopops consumption is on the
rise among girls. Another study last year showed that 78 percent of 8th
graders who drink regularly consume alcopops. This percentage declines as the
drinkers get older, showing the popularity of alcopops to young palates.

"The reclassification of alcopops, is one of many strategies that will help
reduce youth access to these products and the harm that can result: The
Governor's 2006 veto message to AB 417, a deceptive alcohol industry backed
bill which attempted to falsely classify Alcopops as beer instead of distilled
spirits, called for more public debate and serious discussions around the
Alcopops issue. Since the Governor's veto, the Board of Equalization followed
California law and voted to correctly tax Alcopops as distilled spirits
instead of beer. Although not surprised, we are still disappointed to learn of
Diageo's continued efforts to evade proper taxation by filing a lawsuit to
overturn the BOE ruling." stated Judy Walsh-Jackson, Chairperson.

SOURCE California Coalition on Alcopops and Youth

Judy Walsh Jackson, +1-619-947-2755, jwalshjacksonpp@yahoo.com